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“I think gold will look to re-challenge the recent high we just had because of the fact that I think U.S. equities are starting to show that they are susceptible to a decline,” said Phillip Streible, chief market strategist with Blue Line Futures.
“I think investors are going to reconsider their long equity positions, the strength of the recovery, a resurgence of the coronavirus and lockdowns. Due to that, I think people will shift back into the gold market.”
George Gero, managing director with RBC Wealth Management, said he looks for gold to continue building on its gains over the last three weeks, citing strong demand for exchange-traded products and a “dynamic” options expiration that resulted in less margin-call selling than some might have expected. He continues to look for gold to top $1,800 an ounce.
“Gold is still in bullish mode. The Fed is still showing signs of nervousness about the economy and that should favor gold,” said Phil Flynn, senior market analyst with at Price Futures Group, noting that while that while stress tests showed that the U.S. banking system is in OK condition, banks were ordered to suspend stock-buyback programs and limit dividend payments to shareholders.
“The banks must also submit new plans for maintaining enough of the capital needed to survive a downturn,” Fynn continued. “This kind of talk, along with record cases of the cornavirus, should make safe-haven buying in the yellow metal attractive again.”
Jim Wyckoff, senior technical analyst with Kitco, called for higher prices due to a “fully bullish” picture on the technical charts.
“I’m going to stick with the trend,” said Charlie Nedoss, senior market strategist with LaSalle Futures Group. “I’m looking for higher next week.”
He said the dollar appears “toppy” and noted that gold is developing decent chart support, particularly as long as the August futures hold above the 20-day moving average that is currently around $1,739 an ounce.
Meanwhile, Daniel Pavilonis, senior commodities broker with RJO Futures, is among those looking for a pullback. The August futures this week poked above the April highs but soon stalled, creating potential for a double-top on the charts, he pointed out.
“It seems like the market has been kind of in a range trade for the last several months,” he said.
Sean Lusk, co-director of commercial hedging with Walsh Trading, said he anticipates a short-term retreat on selling in the form of profit-taking, especially ahead of the end of the month and second quarter. He pointed out that whenever gold has hit fresh longtime highs in recent months, the move has been followed by a correction, although not necessarily a long-lasting one. However, Lusk added, there has been a tendency for market participants to buy price dips.
“I don’t think there is going to be any flip in [bullish] psychology,” Lusk said.
Afshin Nabavi, head of trading with MKS, said he looks for gold to be range-bound ahead of quarter-end, but then could attempt $1,800 again. “We think it’s in the cards,” he added.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, looks for prices to finish next week not far from where they are as this week winds down.
“I still see potential for a modest pullback, particularly after the recent rally,” he said. “At this point, I don’t think it will be especially long or deep, so will say unchanged for next week.
“Once we start to see second-quarter earnings, we may have volatility in the stock market and that will be positive for gold, so we are only looking for a modest pullback in the next week or two before another move up.”